Galaxy Digital, Mike Novogratz’s firm, is in talks with prediction-market platforms Polymarket and Kalshi to act as a liquidity provider or market maker, focusing on narrowing spreads and improving market efficiency. The move is described as an initial testing phase that could accelerate institutionalization and adoption if it advances toward broader liquidity, positioning Galaxy to influence the development of these emerging markets.
Galaxy has begun small-scale experiments with market-making, according to statements from its management, as a precursor to a larger deployment. A market maker is an agent that continuously posts buy and sell prices to facilitate trade execution and tighten the spread between the two prices, reducing transaction costs and enabling larger orders without moving the price.
The firm sees a significant opportunity in the sector, with internal assessments placing the market around $9.000 millones as a reference for potential.
Galaxy intends to exploit those gaps with institutional capital and algorithms, providing order-book depth and lower execution latency. “We are doing small-scale experiments with market-making,” Mike Novogratz said, referring to the gradual approach the firm is applying.
Regulation, competition and effects on market structure
Kalshi has designated market status from the CFTC — a factor that offers greater legal clarity — while Polymarket has re-entered the U.S. market through the acquisition of QCEX and is planning a “broader push in the U.S. in 2026.” That difference in frameworks forces Galaxy to adapt its offering to each platform and underscores the importance of regulatory compliance to attract institutional capital.
The competitive space is wide: institutional market makers such as Susquehanna and Jump Trading already participate, and larger trading firms and platforms are watching the sector. According to cited figures, Polymarket and Kalshi record combined weekly volumes above $2.000 millones and have reported valuations of up to $15.000 millones and $5.000 millones, respectively.
Galaxy’s entry would add liquidity capacity that could consolidate competitive advantages for both platforms and, at the same time, trigger a new phase of competition among capital providers. If Galaxy expands its role, users could benefit from tighter spreads, lower market impact from large orders, and more consistent prices across platforms; for institutional traders, greater depth would facilitate arbitrage and hedging strategies, while regulators may face increased urgency for clear frameworks that distinguish these markets from traditional betting.
The talks place Galaxy in a key position to influence the professionalization of prediction markets, with the potential to improve liquidity and price discovery without eliminating regulatory risks.
